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Are there any accountants that could help my husband see sense please..(6 Posts)
DH started a new job in December, he appears to be neither employed nor self-employed. I am completely baffled and worried that we are going to end up with a massive tax bill but he assures me that his new company say this is fine so I'm worrying about nothing.
Sorry if this is long winded.
He works in construction and changes jobs (companies often) 95% have been PAYE but he did have one job a year of so ago that was kind of self employed but was paid through an umbrella company whom paid his NI and tax for him each week which was fine.
This new job, he works for a recruitment company. He has to fill in a time sheet and expenses each week, he is then paid by another company. When I've googled the company name that the payments come from it just seems to be a payment making company (didn't even know there was such a thing) no mention of payroll services or anything. They email him a payslip each week but they there is never any tax or NI contributions taken from the pay they just read zero. He's been told by the recruitment company that he DOES NOT need to register as self employed and that he cannot be paid on a PAYE earn basis while using the expenses payroll method.
I say this 100% cannot be correct and the tax will have to paid at some point.
Can anyone tell me if there is a way I could be wrong and this could actually be above board?
Does this link help - about half way down is a list of exceptions: https://www.gov.uk/what-is-the-construction-industry-scheme
Oh possibly Full, thank you. I will have a good read, makes me feel marginally less panicky at least.
I would see an accountant. From what you say it sounds like he may be better SE or as a limited company.
Dh works in a similar way, basically a consulting service for lots of different people. Ltd means he just gets paid into the company, then we use HMRC payroll software to sort NI and tax.
Ltd is more tax efficient for us, and it means we have a cushion tucked away for any down time or longer periods between jobs.
I had this type of pay via a recruitment agency, I sent in time sheets, they processed them but they employed an another company to do the accounts admin by sending the wages to my bank. I did pay tax and NI though
The recruitment agent you are speaking to is almost certainly wrong, because nobody gets away without paying tax or NI.
As your DH is working within construction, as somebody has mentioned above, he is possibly being paid under the CIS scheme. Under the scheme the contractor (who he works for) should be withholding income tax and paying it over to HMRC on DH’s behalf. The subcontractor (your DH) does not have to register for the CIS scheme but it could be worth his while.
If he is being paid under the scheme, then he definitely needs to also register for self assessment as he would be responsible for his own NI and he needs to report his earnings so that any under or over payment of income tax can be amended.
I would suggest as a next step he gets to the bottom of how he is being paid, i.e. is he under the CIS scheme. He must know what his daily / hourly gross rate is so he should be able to determine if anything is being deducted even if it is not properly shown on his documents.
If he really is receiving all payments gross, which he really should not be, then he is absolutely going to be responsible for income tax and NI at the end of the year and you need to put funds aside for this.
(For the avoidance of doubt, I don’t work in personal income tax but I am an accountant of 28 years and try to keep up to date as my CPD).